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High Court Denies School Board’s Relief Request

SNOW HILL – It was three strikes, you’re out this week for the Worcester County Board of Education when the state’s highest court denied a last minute effort to provide relief from paying the $1.1 million settlement lost to a private contractor in a civil suit over a dispute about work done at the new Ocean City Elementary School until the pending appeal is exhausted.

This week’s ruling by the state’s Court of Appeals upholds decisions made by two lower courts in the last few weeks concerning the Worcester County Board of Education’s effort to stay the enforcement of the $1.1 million settlement owed to Beka Industries. The high court’s ruling this week put the school board back on the clock in its effort to secure a bond or letter of credit ensuring the $1.1 million settlement owed to Beka will be in place when the appeal is exhausted.

On Dece. 19, the Court of Special Appeals granted a motion filed by school board attorney James Almand to temporarily stay the enforcement of the judgment until the appeal ran its course, if and only if the Board of Education, or ostensibly Worcester County, had a bond or letter of credit in place by today, Jan. 2. However, the school board made a last-minute effort to have the higher Court of Appeals reverse the decision with an emergency petition for certiorari filed on Christmas Eve, Dece. 24. A petition for certiorari is a document filed by a losing party asking a higher court to reverse the decision of a lower court.

On Tuesday, the Court of Appeals upheld the decision of the Court of Special Appeals, forcing the school board to secure a bond or letter of credit for the $1.1 million settlement. However, the order was changed to reflect a new drop-dead date for securing the money. The Court of Special Appeals ordered the bond or letter of credit to be in place by today, Jan. 2, but the new order handed down by the higher court requires the school board, or more likely Worcester County, to have the bond or letter of credit in place by Monday, with proof of the payment supplied to the Worcester County Circuit Court by noon on Tuesday. According to Beka attorney David Gilliss, the change of the deadline was likely necessitated by state employee furloughs, which has many court employees on leave today.

This week’s order by the Court of Appeals is just the latest chapter in what has become a back-and-forth process in the case in recent weeks. Because the Court of Appeals holds sway over the lower courts, its decision this week essentially means the school board has to secure the bond or letter of credit by Monday with proof provided by Tuesday at noon, or begin paying the $1.1 million settlement to Beka.

“This last effort by the school board was the third attempt to stay the enforcement of judgment,” said Gillis. “First the Circuit Court denied it, then the Court of Special Appeals upheld it with the condition the money be in place, and now the Court of Appeals has weighed in with its opinion the bond or letter of credit must be in place by Monday. This whole idea of the bond has now been resolved.”

The Worcester County Board of Education in 2004 hired Beka Industries to complete various components of the site work for the new Ocean City Elementary school including grading, sediment and erosion control, water and sewer line installation and, ultimately, demolition of the existing school. In August 2005, the school board allegedly became unsatisfied with the pace of the work being done by Beka and replaced the company with another contractor to finish certain components within the scope of the $1.8 million contract.

Last October, Beka filed a breach of contract lawsuit against the Board of Education seeking repayment for the entire amount it estimated it was due for its work on OCES. The amount of the original contract was $1.8 million and the school board had paid the contractor around $1.4 million.

Because of a complicated string of contested change orders within the scope of the project, Beka Industries was seeking around $1.3 million in the lawsuit. On Oct. 9, 2008 visiting Circuit Court Judge R.L. Karwacki ruled in favor of Beka and against the school board, awarding the contractor $1.1 million after a protracted four-day trial in Circuit Court.